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Cep Ltd v

Judgment Cited authorities 3 Cited in 7 Precedent Map Related
Vincent
Judgment Date18 June 2014
Year2014
Citation[2014] 4 HKLRD 44
Judgement NumberHCCL12/2012
Subject MatterCommercial Action
CourtHigh Court (Hong Kong)
HCCL12B/2012 CEP LTD v. 无锡巿佳诚太阳能科技有限公司

HCCL 12/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO 12 OF 2012

(Transferred from High Court Action No 181 of 2011)

_________________

BETWEEN
CEP LIMITED Plaintiff

and
无锡巿佳诚太阳能科技有限公司 (known in English as WUXI JIACHENG SOLAR ENERGY TECHNOLOGY CO, LTD and as WUXI JIACHENG SOLAR ENERGY TECHNOLOGY LIMITED COMPANY) Defendant
_________________
Before: Mr Recorder Jat Sew-Tong SC in Court

Date of Written Submissions by the Defendant: 16 April & 23 May 2014

Dates of Written Submissions by the Plaintiff: 16 & 23 May 2014

Date of Written Reply Submissions: 30 May 2014

Date of Judgment on Costs: 18 June 2014

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JUDGMENT ON COSTS

---------------------------------

1. By my judgment dated 4 April 2014 (“Judgment”), I dismissed the plaintiff’s claim and made a costs order nisi that the defendant shall have its costs of the action to be taxed if not agreed.

2. Both parties applied to vary the costs order nisi:

(1) On 16 April 2014, the defendant applied by summons to vary the costs order nisi so that the plaintiff shall pay the defendant’s costs incurred after 15 November 2012 on an indemnity basis and enhanced interest on such costs at 5% above judgment rate until actual payment, on the basis that the plaintiff failed to do better than the sanctioned payment of HK$1,015 made by the defendant on 18 October 2012.

(2) On 22 April 2014, the plaintiff applied by summons to vary the costs order nisi so that there be no order as to costs, alternatively, that it should bear no more than 40% (or such proportion that the court may think fit) of the defendant’s costs.

3. On 8 May 2014, I gave directions that both applications be dealt with on paper and for the filing of written submissions.

Defendant’s application for indemnity costs and enhanced interest

4. It is convenient to deal with the defendant’s application first.

5. The defendant made a sanctioned payment of HK$1,105 (equivalent to €100) on 18 October 2012. The plaintiff had 28 days, ie up to 15 November 2012, to accept the payment but it did not do so. In the event, the plaintiff failed to do better than the sanctioned payment, because it lost the case.

6. I set out the relevant parts of Order 22, r 23 of the Rules of the High Court:

“Costs consequences where plaintiff fails to do better than sanctioned offer or sanctioned payment (Order 22 r 23)

23. (1) This rule applies where a plaintiff –

(a) fails to obtain a judgment better than the sanctioned payment ...

(2) ….

(3) The court may order the plaintiff to pay any costs incurred by the defendant after the latest date on which the payment … could have been accepted without requiring the leave of the court.

(4) The court may also order that the defendant is entitled to –

(a) his costs on the indemnity basis after the latest date on which the plaintiff could have accepted the payment … without requiring the leave of the court; and

(b) interest on the costs referred to in paragraph (3) or subparagraph (a) at a rate not exceeding 10% above judgment rate.

(5) Where this rule applies, the court shall make the orders referred to in paragraphs (2), (3) and (4) unless it considers it unjust to do so.

(6) In considering whether it would be unjust to make the orders referred to in paragraphs (2), (3) and (4), the court shall take into account all the circumstances of the case including –

(a) The terms of any sanctioned payment or sanctioned offer.

(b) The stage in the proceedings at which any sanctioned payment or sanctioned offer was made.

(c) The information available to the parties at the time when the sanctioned payment or sanctioned offer was made; and

(d) The conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling the payment or offer to be made or evaluated.

(7) The power of the court under this rule is in addition to any other power it may have to award or disallow interest.” (Emphasis added)

7. The question I have to decide is whether it is unjust to make an order under Order 22, r 23 (4) (which, for convenience, I shall call an “enhanced costs order”). In considering this question, I am required to take into account all relevant circumstances of the case, including the matters set out in Order 22 r 23 (6).

8. Ordinarily, a party who fails to beat a sanctioned payment (or sanctioned offer) would expect to have to pay costs on an indemnity basis with enhanced interest: Order 22, r 23 (5). The plaintiff accepts that it bears the burden of showing why it would be unjust to make an enhanced costs order in this case.

9. It is contended on the plaintiff’s behalf that it had acted reasonably towards an unreasonable sanctioned payment, so that it would be unjust to follow the default rule.

10. It is argued that the sanctioned payment was unreasonable in that it was a “nominal offer”. I understand that to mean that the amount of the payment was a nominal sum. But I fail to see why a sanctioned payment for a nominal (or very small) sum is, in itself, unreasonable. The sanctioned payment was plainly made in order to protect the defendant’s costs position, and to put pressure on the plaintiff to take a realistic...

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7 cases
  • Man Hin Fung v Skh Chan Young Secondary School
    • Hong Kong
    • District Court (Hong Kong)
    • 15 Junio 2018
    ...payment made is nominal, it does not fall out of the purview of the rule: See CEP Ltd v Wuxi Jiacheng Solar Energy Technology Co Ltd [2014] 4 HKLRD 44, §§9-14; and HK Civil Procedure 2018 §22/24/1 at §5 on p 568-9. Therefore, I see no merit in the suggestion that just because the sanctioned......
  • Union Glory Finance Incand Others v Merrill Lynch International Bank Ltd And Another
    • Hong Kong
    • High Court (Hong Kong)
    • 13 Diciembre 2016
    ...offer does not have to be of a large amount and a nominal amount qualifies. In CEP Ltd v Wuxi Jiacheng Solar Energy Technology Co Ltd [2014] 4 HKLRD 44, Recorder Jat Sew Tong SC held that a sanctioned payment for a nominal sum was not in itself 13. In a long letter to the plaintiffs’ solici......
  • Cep Ltd v
    • Hong Kong
    • Court of Appeal (Hong Kong)
    • 8 Enero 2016
    ...of the defendant in CACV 165/2014 against the judgment on costs of the judge handed down on 18 June 2014 (“the Costs Judgment”; [2014] 4 HKLRD 44). By the Costs Judgment, the judge varied his order nisi (giving the defendant the costs of the action on dismissing the plaintiff’s claim) as fo......
  • Cep Ltd v
    • Hong Kong
    • Court of Appeal (Hong Kong)
    • 8 Enero 2016
    ...of the defendant in CACV 165/2014 against the judgment on costs of the judge handed down on 18 June 2014 (“the Costs Judgment”; [2014] 4 HKLRD 44). By the Costs Judgment, the judge varied his order nisi (giving the defendant the costs of the action on dismissing the plaintiff’s claim) as fo......
    • Request a trial to view additional results

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